Gold Spot Price Open: $1,246
Gold Spot Price Close: $1,245
Change in Gold Spot Price: -$1
Silver Spot Price Open: $16.48
Silver Spot Price Close: $16.34
Change in Silver Spot Price: -$0.14
Gold and silver lost some value on Tuesday, but all in all neither metal conceded all that much value, and not nearly enough to counteract the gains that have been made in the past few days. When all was said and done, gold lost about one dollar while silver conceded about fourteen cents. Platinum and palladium finished mixed on the day, but neither metal lost too much value.
1st-Quarter Productivity Better Than Expected
Despite the Labor Department reporting last month that first-quarter worker productivity contracted by more than 1% from the 4th quarter of 2015, today brought about a revision that painted a more upbeat picture of the US economy. Instead of first-quarter worker productivity contracting by more than 1%, the Labor Department reported today that the actual contraction was only little more than .5%.
In addition, costs related to labor increased more dramatically than expected during the first few months of the year. All in all, today’s data did not have much of an impact on the global marketplace and did not alter the way investors feel about the US economy all that much.
Commenting on the data and its lack of impact on the marketplace was Blerina Uruci, economist for Barclay’s, who said, “Despite subdued wage growth, low productivity growth means that companies still face significant labor costs for producing an extra unit of output. Fast-rising unit labor costs have been associated with weak profits for companies in recent years.” With the US Dollar being as strong as it has been, it is no surprise that corporate profits have been more disappointing than anything else. The stronger Dollar makes it more expensive for foreign companies to purchase US goods, and this is something that is reflected in many corporations’ bottom line.
As for what today’s data means for the outlook regarding interest rate hikes, that much is tough to say. The upward revision lends itself to rates being raised this month, but there is no way to know this for certain.
Upbeat European Economic Data Boosts Stocks
Investor sentiment across the European Union was given a huge boost on Tuesday thanks to some upbeat economic data from the region. Today was a day of revisions as revised data showed that the EU economy grew by more than originally reported in the first-quarter. In addition, German industrial production came back more positively than anticipated. The European Union is still performing at a sub-par level economically, but we are seeing some signs of improvement. As the year progresses it would be encouraging to see the region continue to expand its economy.
European energy shares performed well on Tuesday thanks to crude oil temporarily rising above $50/barrel. Whether crude will retain this elevated position or not remains to be seen, but for now energy stocks are benefitting.
Wrap-Up
All in all Tuesday was a relatively quiet day across the global marketplace and did not offer much in the way of fresh fundamental data. Of course, there was continued speculation with regard to when interest rates will be raised and whether that will happen this month or not. Up until recently it was more or less set in stone that rates would be hiked at June’s installment of the FOMC meeting, but last week’s poor jobs data from the United States sent a shockwave of doubt across the investing world.
As we head further into this week, it will be interesting to see what the tone of economic data will be from the US and elsewhere around the world. For now, gold and silver are still in a relatively solid position and are benefitting from the continued doubt as to whether rates will be raised or not.
